Management Accounting

The nature, source and purpose of management information
Accounting for management- purpose and role of cost and
management accounting, Comparison between financial
accounting, cost accounting and management accounting.
Managerial processes of planning, decision making and
control, Difference between strategic, tactical and
operational planning.
Distinction between data and information. Identify and
explain the attributes of good information. Limitations of
management information in providing guidance for
managerial decision-making
Sources of data- sources of information from within and
outside the organisation (including government statistics,
financial press, professional or trade associations, quotations
and price list.
Uses and limitations of published information/data
Impact of general economic environment on costs/revenue
Sampling techniques (random, systematic, stratified,
multistage, cluster and quota), identifying appropriate
sampling method in a specific situation.
Presenting information
Reports representing management information in suitable
formats
Present information using tables, charts and graphs (bar
charts, line graphs, pie charts and scatter graphs)
Interpret information presented in management reports

BUDGETING
Nature and purpose of budgeting
Planning and control cycle in an organisation.
Administrative procedures and stages used in the budgeting
process
Statistical techniques
Advantages and disadvantages of using high low method to
estimate the fixed and variable element of costing
Scatter diagrams and lines of best fit.
Analysis of cost data
Concept, calculation and interpretation of correlation
coefficient and coefficient of determination
Establish a linear function using regression analysis and
interpret the results
Use linear regression coefficients to make forecasts of costs
and revenues
Advantages and disadvantages of linear regression analysis.
Product life cycle – Concept and importance
Principles of time series analysis (cyclical, trend, seasonal
variation and random elements), advantages and
disadvantages
Moving averages, trend analysis using regression
coefficients
Trend and seasonal variation (additive and multiplicative) to
make budget forecasts
Purpose of index numbers, Calculate simple index numbers
for one or more variables
Computer spreadsheet system- role and features,
applications and its use in cost and management accounting
Budget preparation
Concept and importance of budget
Prepare sales budgets, functional budgets (production, raw
materials usage and purchases, labour, variable and fixed
overheads),Cash budgets, Master budgets
Explain and illustrate ‘what if’ analysis and scenario
planning
Flexible budgets
Importance, advantages and disadvantages of flexible
budgets
Identify situations where fixed or flexible budgetary control
would be appropriate
Flex a budget to a given level of volume

Capital budgeting and discounted cash flows:
Capital investment planning and control
Define and distinguish between capital and revenue
expenditure
preparation of a capital expenditure budget
difference between simple and compound interest, and
between
nominal and effective interest rates
Compounding and discounting
distinction between cash flow and profit and the relevance
of cash flow to capital investment appraisal
cash flows for individual investment decisions
net present value (NPV) and internal rate of return (IRR)
methods of discounted cash flow
Calculate NPV, IRR and payback (discounted and non-
discounted)
Calculate NPV, IRR and payback (discounted and non-
discounted)

IV
Budgetary control and reporting
Calculate simple variances between flexed budget, fixed
budget and actual sales, costs and profits
Importance of variances, potential action to eliminate
Variances
concept of responsibility accounting and its significance in
Control
Controllable and uncontrollable costs
Control reports to management
Behavioural aspects of budgeting, importance of motivation
in performance management, factors in a budgetary
planning that influence motivation
Impact of targets upon motivation
Managerial incentive schemes
advantages and disadvantages of a participative approach to
Budgeting
top down, bottom up approaches to budgeting
STANDARD COSTING

Standard costing systems- Purpose, principles and importance.

Difference between standard, marginal and absorption costing

standard cost per unit under absorption and marginal costing Calculation of Material, Labour and Overhead Variance

and its analysis,

sales price and volume variance Interpret the variances

Explain factors to consider before investigating variances, explain possible causes and recommend control action

Explain the interrelationships between the variances

Reconcile budgeted profit with actual profit under standard absorption costing

Reconcile budgeted profit or contribution with actual profit or contribution under standard marginal costing

PERFORMANCE MEASUREMENT
Performance measurement overview, purpose of mission
statements and their role in performance measurement
Purpose of strategic and operational and tactical objectives
and their role in performance measurement
Impact of economic and market conditions on performance
measurement, impact of government regulation on
performance measurement
Measures of financial performance (profitability, liquidity,
activity and gearing) and non financial measures
Perspectives of the balanced scorecard
Advantages and limitations of the balanced scorecard
Performance indicators for financial success, customer
satisfaction, process efficiency and growth
Critical success factors and key performance indicators and their link to objectives and mission statements

Establish critical success factors and key performance indicators

Concepts of economy, efficiency and effectiveness and their performance indicators

Computation of Efficiency, capacity and activity

Building Block Method
Performance measures suitable in contract and process costing

Resource utilization- measures of performance utilisation in service and manufacturing environments

Profitability- calculate return on investment and residual income

Advantages and limitations of return on investment and residual income

Service Quality- distinguish performance measurement issues in service and manufacturing industries

Cost reductions and value enhancement Value analysis

Monitoring performance and reporting
Importance of non-financial performance measures, relationship between short-term and long-term performance Measurement of performance in service industry situations,

non-profit seeking and public sector organizations Role of benchmarking in performance measurement

Reports highlighting key areas for management attention and recommendations for improvement